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Federal Appeals Court Hears Florida Health Care Challenge

Grappling with how far Congress’ powers can go, three appeals-court judges Wednesday pointedly questioned attorneys in a case that could decide the future of last year’s federal health overhaul.

Florida has spearheaded the case, which primarily challenges part of the law that will require almost all Americans to have health insurance starting in 2014 — known widely as the “individual mandate.”

“Let’s talk about the individual mandate,” Joel Dubina, chief judge of the 11th U.S. Circuit Court of Appeals, said early in hearing that lasted 2 ½ hours. “That’s the heart of this case.”

With Florida Attorney General Pam Bondi and former Attorney General Bill McCollum sitting at the front of the ornate courtroom, lawyers for opponents said it is unprecedented for Congress to force Americans to buy a product such as health insurance. They disputed that the U.S. Constitution’s allows such power.

“They (uninsured people) are not engaged in commerce,” said Paul Clement, a lead attorney for the opponents, which also include 25 other states. “They’re sitting in their living rooms. They’re not doing anything.”

But Acting U.S. Solicitor General Neal Kumar Katyal said health insurance — and decisions not to buy insurance — affect interstate commerce. He said uninsured people seek care at hospital emergency rooms, shifting billions of dollars a year in costs to other people who pay them through increased insurance premiums.

“Congress is entitled to wide deference in the way it deals with the problem,” Katyal said.

The case is perhaps the most widely watched legal challenge to the landmark federal law, which President Obama and Congress approved in March 2010. The appeal stems from a January decision by Pensacola federal judge Roger Vinson that the law is unconstitutional.

Dubina and Judges Frank M. Hull and Stanley Marcus repeatedly interrupted the attorneys with questions, trying to poke and prod at the intricacies of the issues.

At one point, for example, Marcus asked Katyal whether Congress also would have the power to require people to buy long-term care insurance. He said few people have the insurance but nursing-home and other long-term care costs often get passed on taxpayers.

Hull, meanwhile, probed whether people are making economic decisions when they choose not to buy insurance and said everybody is just an “instant away” from needing health care.

Dubina also questioned whether health care should be considered unique compared to other types of products or services. But Michael Carvin, an attorney for the National Federation of Independent Business, another plaintiff in the case, called the uniqueness issue “smoke and mirrors.”

“What difference does it make if it is unique?” Carvin asked.

It was impossible to determine from the hearing how the judges will rule — they hammered both sides with questions. The court could take months to come to a decision, and Dubina acknowledged at the end of the hearing that the case likely will be later decided by the U.S. Supreme Court.

“I doubt this is the last time we’ll hear arguments in this case,” Dubina said.

Bondi gathered with other attorneys general outside the courthouse afterward to express confidence that the court will strike down the law. Meanwhile, McCollum — who filed the case immediately after Obama signed the law — said it raises constitutional questions about congressional powers that go far beyond health care.

“This is a real, real big reach,” he said.

The health law has fueled a massive political fight, with much of the debate centering on the requirement that people buy insurance. People who don’t comply with the mandate will face financial penalties.

The debate also has led to political scrutiny of the judges involved. Dubina was appointed by former Republican President George H.W. Bush, while Hull and Marcus were both appointed by former Democratic President Bill Clinton.

The mandate is only part of 2,700-page bill, which also includes provisions such as expanding Medicaid and preventing insurers from denying coverage to people with pre-existing health conditions.

In his January ruling, Vinson tossed out the entire law because, he said, the mandate was critically intertwined with other parts of the law.

The appeals judges Wednesday asked several questions about whether other parts of the law could be allowed to continue if the mandate is ruled unconstitutional — a legal concept known as “severability.”

Katyal said much of the law could go forward, except for the part that bans insurers from denying coverage because of pre-existing conditions. Without the mandate, insurers could get hit with a large number of people with costly pre-existing conditions but would not be assured of also getting a large number of healthier customers to help offset the expenses.

Clement called the mandate the “driving force” behind all of the health changes.

“We take the position the whole thing fails (if the mandate is unconstitutional),” he said.

The judges also focused on part of the law that will change income-eligibility requirements for Medicaid in 2014 and allow millions of additional people to enroll in the program. The move is designed to help carry out the mandate’s broader goal of people being insured.

Florida and other states argue that Congress is “coercing” them into expanding Medicaid. If states don’t go along with the expansion, they could lose billions of dollars in federal Medicaid funds.

Dubina described the state’s Medicaid coercion argument as “pretty powerful.” But he questioned Clement about whether states could simply pull out of Medicaid if they don’t like the new requirements.

Clement, however, said that is not realistic for states, which need federal Medicaid money to pay for health services for low-income people.

“This is the case that crosses the line,” he said.

But Katyal said Congress has always had the power to “change the rules” in the Medicaid program and has taken steps in the past that have expanded eligibility. He also said the federal government will pick up the tab for newly eligible people until 2017 and later will pay 90 percent of the cost.

“They (states) knew the terms of the deal going in,” Katyal said.

By Jim Saunders
The News Service of Florida